It's difficult finding anyone today who doesn't believe chip giant STMicroelectronics NV urgently needs a new growth strategy. And that pertains to people both within and outside the European semiconductor giant.
Generally, company executives and industry analysts believe the Swiss-based semiconductor company must channel a new course for its future. The disagreement comes in deciding whether ST should drastically reorganize its operations and product portfolio—which means jettisoning burdensome and non-core offerings—or simply fine tune its current strategy, stay the course and gradually build up a formidable position in its market-leading products.
ST has said it will early in December unveil its plans and attempt to put to rest finally speculations about its future. Those speculations have centered on alleged plans by ST to
split itself into two business units, a move the company has rejected.
No one in the investment community would be surprised if ST decided to go ahead with a split or dump ST-Ericsson, the communications IC joint venture with Ericsson that's considered a dead weight around the two companies' corporate necks. ST's management shouldn't be shocked, either, if investors react negatively to a plan that doesn't surgically pinpoint and addresses the company's perceived problems. In other words, ST must come up with a reorganization plan that confirms executives realize the company cannot continue with business as usual.
A breakup of ST into two companies—one focused on analog and the other on digital ICs—makes little sense in my opinion. The worn dialogue pitting analog and digital companies against each other in terms of return on investments is irrelevant in today's world. In fact, it is a short-sighted take on what semiconductor companies must do nowadays to not merely survive but be competitive. The analog and digital worlds co-exist and will continue to do so. For the biggest chip companies, analog and digital offerings are complementary and in fact may be critical to winning business at major OEMs.
ST's most important strengths lie in the extensive product offerings and the wide range of markets served, including automotive, computing, communications, control systems, consumer and industrial automation. This has allowed the company to offset weakness in any particular market sector with strength in other segments. And, while its growth has been less than impressive lately—annual sales will decline for the second consecutive year in 2012—the company's performance could have been worse had it not been able to rely on faster-growing product lines to counter the impacts of its weak segments.
What good is a phone without cellular connectivity? ST-E can provide the WLAN solution but its not always that it can provide cellular connectivity. Lets leave it at that as I am not in a position to elaborate.
Renesas Mobile never existed before Nokia sold its modem division. That should be a clear indication that RM is what former Nokia modem was. The Mitsubishi, Hitachi and NEC alliance was doing mobile multimedia and nothing to do with cellular modems and was later merged with RM. Nokia modem was the first in getting many technologies deployed in handsets.
I tend to agree with the sentiment that offering a me too strategy is not going to lead to growth. But then I look at what Samsung has done relative to Apple. Samsung in many ways has been a successful me too relative to Apple. And the other players are all jealous of both Apple and Samsung.
The Arm players are doing well and Intel is somewhat on the defensive end these days since the PC market is not growing much these days. Most of the Arm players are not doomed.
ST has failed in its wireless business because it is insular and too cautious. Most of ST's American offices are already shutdown or going that way. Bozotti is just a empty suit compared to his predecessor with no vision and most of ST management is like that these days. The governments of Italy and France probably don't have the money to bailout ST. ST will only get broken up when it faces bankruptcy. So I think ST will still exist, but I don't see ST as particularly innovative any more. ST has always focused on the process and not on the end product. So its successes have been more by accident rather than by good management.
As far as connectivity is concerned, WLAN is the cheapest wireless connection right now, NOT the cellular modem. If you take a large picture view of connectivity, you should see that cellular modem without WLAN is half-baked. Mobile Phone is only a subset of the universe of Connected Devices.
ST-E has,over the years, absorbed EMP (Ericsson Mobile Platform), Philips Semiconductor's cellular modem group. Further, STM was a reasonably contender for cellular modem ICs before ST-E was formed. There were trade articles claiming that STM also absorbed some modem related groups from Nokia.
In contrast, Renesas Mobile's core was the former cellular modem groups from Mitsubishi, NEC, Hitachi Semiconductors (more dominated by Mitsubishi). It acquired the over-1000 people team from Nokia when it became a financial and operational burden for Nokia. Considering the contribution of Japanese semiconductors in cellular modems since GPRS and CDMA2000, it is only logical to rate ST-E way above Renesas Mobile. "Laughing Stock" refers to the fact that Renesas Mobile is loosing good money due to bad management since it was formed.
Most of the ARM Players are doomed. Look at TI, Freescale, Marvell. ST is not a different story either. When things become commodity, companies involved lose big time. They are all peddling commodity products with MeToo features. They will all get burnt
I think throwing away some business units that are competitive anymore should be very natural for large companies like STM. I think keeping the MCU , MEMS and analog segments are good but STM really should think about other digital functionalities.
STM32f4 discovery is the best arm processor available in the world produced by St; But there is insufficient support on all over product portfolia of ST. if you have not a beginner side of view you generally loss...
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